finance exam 1

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Total Assets

common size financial statements present all balance sheet account values as a percentage of _____.

sells its entire inventory an average of 15 times each year

if a firm has an inventory turnover of 15, the firm:

cash flow from assets

involves three components: operating cash flow, capital spending, and change in net working capital

provide limited liability while avoiding double taxation

limited liability companies are primarily designed to

current assets minus current liabilities

net working capital is defined as

working capital

refers to a firms short term assets, such as inventory and its short term liabilities, such as money owed to suppliers.

operating cash flow

refers to the cash flow that results from the firm's day-to-day activities of producing and selling

capital spending

refers to the net spending on fixed assets (purchases of fixed assets less sales of fixed assets)

Capital Structure

refers to the specific mixture of long term debt and equity the firm uses to finance its operations.

Liqudity

refers to the speed and ease with which an asset can be converted to cash. Income statement includes non cash items

Capital Budgeting

the financial manager tries to identify investment opportunities that are worth more to the firm than they cost to acquire.

Balance Sheet

the financial statement that summarizes a firm's accounting value as a particular date is called the ____.

a perpetuity

the jones brothers recently established a trust fund that will provide annual scholarships of $12,000 indefinitely. These annual scholarships are:

sustainable growth rate

the maximum growth rate that can be achieved with no external equity financing while maintaining a constant debt equity ratio

internal growth rate

the maximum growth rate that can be achieved with no external financing of any kind.

risk

the uncertainty of the outcome of an investment

treasury bill

what always has a maturity of less than a year

Taco and cheif

what are his dogs names?

character, capital, collateral, conditions, capacity

what are the 5 C's of credit?

The controller reports directly to the chief financial officer.

what is a common chain of command within a corporation?

cash payment of an account payable

which of the following actions will increase the current ratio, all else constant? assume the current ratio is greater than 1.0.

under fractional reserve banking, banks lent out the money that people held in their accounts, so they had to make paper currency to represent the new money lent out

How did new paper currency come about?

profit margin, return on assets, return on equity

Outdoor gear reduced its general and administrative costs this year. This cost improvement will increase which of the following ratios?

agency

The potential conflict of interest between a firm's owners and its managers are referred to as which type of conflict?

Working Capital Management

Theo's BBQ has $48,000 in current assets and $39,000 in current liabilities. Decisions related to these accounts are referred to as​

annuity

Travis is buying a car and will finance it with a loan that requires monthly payments of $265 for the next four years. His car payments can be described by what

Income Statement

the accounting statement that measures the revenues, expenses and net income of a firm over a period of time is called the ______.


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